Cost of Driving Goes Sideways
So you thought that the recession and reduced fuel costs would lower your transportation costs overall? Not so, according to the AAA’s report 2009 Your Driving Costs. It shows that the average cost of owning and operating a new car in the U.S. has remained relatively unchanged year after year, despite lower gasoline prices. The average cost of a new sedan driven 15,000 miles per year is 54 cents per mile, representing a drop of only 0.1 cent versus the costs reported in 2008.
“While motorists are experiencing relief at the pump, those savings have been countered by revised Environmental Protection Agency fuel economy estimates and increases in vehicle ownership costs, such as insurance premiums, depreciation, finance charges, and other fees and taxes,” said AAA Automotive Vice President Marshall L. Doney.
AAA estimates that the cost to own and operate a typical new sedan driven 15,000 miles yearly is $8,095, which puts just $26 in your pocket. (Last year’s estimated cost was $8,121.) Small sedan costs were unchanged at 42.1 cents per mile, or $6,312 annually. Midsize sedan costs dropped by 1.1 cents since last year -- to 54 cents per mile, or $8,105 per year -- thanks to maintenance cost savings and lower depreciation. However, the cost of large sedans rose by 0.7 cents -- to 65.8 cents per mile, or $9,870 yearly -- due largely to increased depreciation.
SUV owners, whose vehicles typically get lower fuel economy, benefitted most from the drop in fuel prices. Their estimated operating costs dipped by 1.3 cents -- to 68.4 cents per mile, or $10,259 per year -- despite a relatively large increase in depreciation and insurance premiums. Meanwhile, minivan costs jumped by 1.2 cents -- to 58.8 cents per mile, or $8,815 yearly. The growth, which includes the largest rise in depreciation of any vehicle class, is due to cost increases in every area except fuel.
AAA’s 2009 edition of Your Driving Costs uses the U.S. Environmental Protection Agency’s revised fuel economy estimates; they are intended to better reflect “real world” results. This is expected to result in more accurate predictions of annual vehicle costs now and in the future.
“AAA was a strong advocate for updating the EPA’s guidelines for calculating fuel economy so new car buyers could have a realistic estimate of a vehicle’s miles per gallon before their purchase,” Doney said. “The ability to use EPA estimates more closely based on ‘real world’ conditions in our calculations has made Your Driving Costs an even more valuable tool for consumers.”
AAA’s calculations are based on both operating and ownership costs. The operating costs include fuel, maintenance and tires, while ownership costs include insurance, license fees, registration fees, taxes, depreciation and financing. The costs are based on typical use of a vehicle for personal transportation over five years and 75,000 miles of ownership. Fuel costs are based on $2.30 per gallon. The driving costs in each category are based on the average expenses for five top-selling models selected by AAA.
Driving Today contributing editor Luigi Fraschini writes frequently about financial matters revolving around the automobile.